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11. FREE CASH FLOW
The components of free cash flow, which is a non GAAP measure, are presented in the table below and reconciled to net cash inflow
from operating activities, the most directly comparable IFRS measure. Free cash flow is not defined in IFRSs but is a key indicator
used by management to measure operational performance.
2007 2006 2005
£m £m £m
Cash generated from operations before taxation 5,245 5,777 5,906
Income taxes paid, net of repayments (35) (390) (332)
Net cash inflow from operating activities 5,210 5,387 5,574
Included in cash flows from investing activities
Net purchase of property, plant and equipment, computer software and licences (3,209) (2,874) (2,945)
Net (purchase) sale of non current financial assets (3) (1) 537
Dividends received from associates and joint ventures 612
Interest received 147 185 374
Included in cash flows from financing activities
Interest paid (797) (1,086) (1,260)
Free cash flow 1,354 1,612 2,282
12. INTANGIBLE ASSETS
Goodwill
Telecommunication
licences and other
Brands, customer
lists, and
relationships
Computer
softwareaTotal
£m £m £m £m £m
At 1 April 2005 404 197 84 1,160 1,845
Additions – – – 592 592
Disposals and adjustments – – – 8 8
Exchange differences 18 8 – 8 34
Acquisitions through business combinations 121 1 22 16 160
At 1 April 2006 543 206 106 1,784 2,639
Additions – – – 807 807
Disposals and adjustments – (15) – (104) (119)
Exchange differences (20) (10) – (12) (42)
Acquisitions through business combinations 296 4 12 12 324
At 31 March 2007 819 185 118 2,487 3,609
Amortisation
At 1 April 2005 51 – 415 466
Charge for the year 9 11 230 250
Acquisitions – – 15 15
Disposals and adjustments – – (8) (8)
Exchange differences 2–68
At 1 April 2006 62 11 658 731
Charge for the year 11 13 360 384
Acquisitions 1–78
Disposals and adjustments (8) – (73) (81)
Exchange differences (7) – (10) (17)
At 31 March 2007 59 24 942 1,025
Carrying amount
At 31 March 2007 819 126 94 1,545 2,584
At 31 March 2006 543 144 95 1,126 1,908
aIncludes additions in 2007 of £741 million (2006: £544 million) in respect of internally developed computer software.
Consolidated financial statements Notes to the consolidated financial statements
102 BT Group plc Annual Report & Form 20-F